Re: [Marxism] Dueling Powers and Capitalist Property in the UnitedStates by Matt Russo

["Anthony Boynton" <anthony.boynton@xxxxxxxxx>]

Re: [Marxism] Dueling Powers and Capitalist Property in the UnitedStates by
Matt Russo



I want to thank Joaquin Bustelo for taking the time to answer some of my
comments.



Unfortuantely, Joaquin's arguemtns have a few holes in them. The first is
that he can not not add very well.



He wrote,



"So let's look at an example: I've lived in the same townhouse for 10 years.

My down payment was around $5,000, the original mortgage was for around

$82,000; I still owe something like $70,000. In this neighborhood right now

you might get $120,000 for this house. But having been paying around $700

(including insurance and taxes) a month for the mortgage for 10 years I've

laid out $84,000, not counting a ton of other expenses. So if I were to

sell it for $120,000, I would get $113,000 (subtracting the commission for

real estate agents) or $26,000 more than I "paid" for it ($87,000), and I'd

have $43,000 left over after paying the mortgage.



Even if the house had doubled in price over 10 years (7% average annual

increase), selling for $174,000, there would be around $163,000 left after

real estate commissions and $93,000 after the mortgage. So I've paid $84,000

in mortgage, $5,000 down, and even leaving maintenance etc, completely out

of it, I got $93,000 BACK for my $89,000 PAID OUT. But it gets worse, since

those original $5,000 were decade-ago dollars, worth something like $1.40 or

$1.50 today, and then you'd have to do the corresponding calculation for

each year's mortgage payment to translate to current dollars, and you will

see you paid out A LOT MORE than you're getting back."



To your $93,000 dollars you must add the rent that you otherwise would have
had to pay for the same townhouse, had you not bought it.



Being generous, let's say rent in Hoaquin's neighborhood, for a town house
like his, is around $500/month. He says he has lived there ten years, or 120
months. That adds up to a $60,000 profit.



The correct number, in nominal terms, for Joaquin's investment, is $93,000
plus aprox. $60,000. A nice profit, and not just in nominal terms.



Joaquin's arguments apply as well to investments made by any capitalist in
any real estate, not just to the purchase of a townhouse whereever he lives.
In fact, most of his arguments about brokerage fees, inflation, etc. apply
to any investment in anything by anbody: stocks, bonds, gold, a factory,
wheat futures, etc-



Come on Joaquin. You can do better than this.. Also, I know it is difficult
for you to take quotes from Marx seriously, having lived through the SWP and
hated it so much, but Marx had a lot of interesting insights.

Anthony
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